Global plastics manufacturer and supplier, Carclo, has reached an agreement with its pension scheme trustees to make deficit repair contributions (DRCs) totalling £10.5m over the next three years.

Forming part of a broader revised funding arrangement with its two main secured creditors, HSBC and the pension scheme, the agreement will see the company increase its contributions up to £2.8m in 2021, £3.9m in 2022, and a further £3.8m in 2023.

The agreement also saw Carclo enter into new facilities with HSBC, comprising of a term loan of £34.5m and a revolving credit facility of £3.5m.

Carclo emphasised that securing a “suitable long-term funding position” for the group remained a key focus of the board.

It argued that the “more stable base” established under this agreement will allow it to shift its focus on delivering growth strategies aimed at capturing "significant long-term opportunities" available.

The deficit in respect of the group's defined benefit pension as at 30 September 2019 was £51.3m, with a prior pension contribution agreement, agreed in 2019 and effective until January 2021, requiring the company to make contributions of £2.7m per annum.

Whilst the group previously acknowledged the need for an increase in future contributions to the pension scheme, it had emphasised the need for this to be both affordable to the group and acceptable to the pension trustee.

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